Section 132.

CONVERSION FROM AN ORDINARY CORPORATION TO ONE

PERSON CORPORATION

A One Person Corporation may be converted into an ordinary stock corporation after due
notice to the Commission of such fact and of the circumstances leading to the conversion, and
after compliance with all other requirements for stock corporations under this Code and
applicable rules. Such notice shall be filed with the Commission within sixty (60) days from the
occurrence of the circumstances leading to the conversion into an ordinary stock corporation. If
all requirements have been complied with, the Commission shall issue a certificate of filing of
amended articles of incorporation reflecting the conversion.
In case of death of the single stockholder, the nominee or alternate nominee shall transfer
the shares to the duly designated legal heir or estate within seven (7) days from receipt of either
an affidavit of heirship or self-adjudication executed by a sole heir, or any other legal document
declaring the legal heirs of the single stockholder and notify the Commission of the transfer.
Within sixty (60) days from the transfer of the shares, the legal heirs shall notify the Commission
of their decision to either wind up and dissolve the One Person Corporation or convert it into an
ordinary stock corporation.
The ordinary stock corporation converted from a One Person Corporation shall succeed
the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of
conversion.

IN CASE OF DEATH OF SINGLE STOCKHOLDER

NOMINEE OR TRANSFER THE SHARES DESIGNATED HEIR OR ESTATE

ALTERNATE (affidavit or self- (7 days from receipt of
NOMINEE adjudication executed by affidavit or self-adjudication)
a sole heir)

NOTE: Within 60 days from the transfer of the shares, the legal heirs shall notify the
Commission of their decision to either wind up and dissolve the One Person Corporation or
convert it into an ordinary stock corporation.

CONVERSION:

ONE PERSON CORPORATION

NOTICE TO COMMISIONER
(60 days from the occurrence of the circumstances leading to the conversion)

COMPLIANCE WITH ALL THE REQUIREMENTS

OF A STOCK CORPORATION

CERTIFICATE OF FILING OF AMENDED ARTICLES

OF INCORPORATION
(Issued by the commissioner if all the requirements have complied)

ORDINARY STOCK CORPORATION

NOTE: The ordinary stock corporation converted from a one Person Corporation shall succeed
the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of
conversion.

The Secretary of Exchange Commission drafts guidelines on the conversion of an

ordinary stock corporation into One Person Corporation but is silent as to the conversion of One
Person Corporation into ordinary stock corporation.

Under the draft guidelines, only a domestic stock corporation may be converted into an
OPC and the single stockholder may only apply for conversion after acquiring all outstanding
capital stock of the corporation. The process is the same as amending Articles of Incorporation to
include the suffix OPC in the corporation’s name and remove any suffix indicating an ordinary
stock corporation such as Corporation and Incorporation. The corporation must also amend its
Articles of Incorporation to reduce the number of directors, name a nominee and alternate
nominee, and amend or remove provisions distinctive to ordinary stock corporations, among
others.

In addition, the Commission will require a Secretary’s Certificate that the single
stockholder acquired all outstanding shares in the corporation and has decided to convert the
corporation to OPC, and for that purpose, has decided to amend the articles of incorporation,
repeal the by-laws of the corporation and appoint a nominee and alternate nominee for the OPC.

The Secretary’s Certificate should also state that all taxes and obligations in favor of the
government has been settled, and that the corporation or any of its stockholder, director, or
officer is not involved in any intra-corporate dispute. Other requirements include Proof of
Acquisition of all the outstanding shares; Affidavit of Acceptance by the nominee and alternate
nominee, name reservation; Monitoring Clearance of the ordinary stock corporation; and
Undertaking to Change Corporate Name by the single stockholder.

The conversion of an ordinary stock corporation into an OPC shall take effect upon
approval by the Commission of the Amended Articles of Incorporation through the issuance of a
Certificate of Filing of Conversion to One Person Corporation. Upon approval of the conversion,
the OPC will retain its SEC Company Registration Number. It shall also maintain legal
responsibility for the ordinary stock corporation’s outstanding liabilities and obligations as of the
date of approval of the conversion.

Using this guidelines using logical thinking we can know that the process in converting
an OPC into Ordinary Corporation is the same as amending its Articles of Incorporation to
include any suffix indicating an ordinary corporation like “corporation” and “incorporation and
remove the suffix OPC, remove the designated nominee and alternate nominee, to add directors
as required by law, and amend or remove provisions distinctive to an OPC.

The conversion will change the form of the corporation. As to its purpose, it can be
change after the conversion. According to Section. 15 of the corporation code, Unless otherwise
prescribed by this Code or by special law, and for legitimate purposes, any provision or matter
stated in the articles of incorporation may be amended by a majority vote of the board of
directors or trustees and the vote or written assent of the stockholders representing at least two-
thirds (2/3) of the outstanding capital stock, without prejudice to the appraisal right of dissenting
stockholders in accordance with the provisions of this Code.
The articles of incorporation of a nonstock corporation may be amended by the vote or
written assent of majority of the trustees and at least two-thirds (2/3) of the members. The
original and amended articles together shall contain all provisions required by law to be set out in
the articles of incorporation. Amendments to the articles shall be indicated by underscoring the
change or changes made, and a copy thereof duly certified under oath by the corporate secretary
and a majority of the directors or trustees, with a statement that the amendments have been duly
approved by the required vote of the stockholders or members, shall be submitted to the
Commission.
The amendments shall take effect upon their approval by the Commission or from the
date of filing with the said Commission if not acted upon within six (6) months from the date of
filing for a cause not attributable to the corporation.

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